Petition for Writ of Certiorari — Minnesota Living Assistance, Inc., dba Baywood Home Care, Petitioner v. Ken B. Peterson, et al.

NO.

In the Supreme Court of the United States

MINNESOTA LIVING ASSISTANCE, INC.,

d/b/a BAYWOOD HOME CARE,

v.

KEN B. PETERSON, et al.,

Petitioner,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Eighth Circuit

PETITION FOR WRIT OF CERTIORARI

Bruce J. Douglas

Counsel of Record

OGLETREE, DEAKINS, NASH,

SMOAK & STEWART, P. C.

Capella Tower

225 South Sixth Street

Suite 1800

Minneapolis, MN 55402

Telephone: 612.339.1818

Facsimile: 612.339.0061

bruce.douglas@ogletree.com

Counsel for Petitioner

Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001

i

QUESTIONS PRESENTED

I. The question presented is whether the principles

enunciated in Younger v. Harris and its progeny

require a federal court, having properly before it a

claim that a federal statute preempts a state law,

should abstain from the deciding the federal

question of preemption because a state executive

branch agency has initiated a civil administrative

proceeding against the federal plaintiff solely under

the state law.

II. The question presented is whether the Court of

Appeals erred by applying an abuse of discretion

standard to a District Court’s decision to apply the

abstention principle enunciated in Younger v.

Harris and, therefore, erred in affirming the

District Court’s decision.

ii

PARTIES TO THE PROCEEDINGS

Petitioner, Minnesota Living Assistance, Inc. doing

business as Baywood Home Care, was the appellant in

the court below. Respondents, Kenneth Peterson,

Commissioner, Minnesota Department of Labor and

Industry, and John Aiken, Interim Director of Labor

Standards of the Minnesota Department of Labor and

Industry, were the appellees in the court below.

RULE 29.6 CORPORATE DISCLOSURE

STATEMENT

Petitioner, Minnesota Living Assistance, Inc. doing

business as Baywood Home Care is not publicly traded,

has no parent companies, and no publicly traded

company holds 10% or more of its membership shares.

iii

TABLE OF CONTENTS

QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . i

PARTIES TO THE PROCEEDINGS . . . . . . . . . . . . ii

RULE 29.6 CORPORATE DISCLOSURE

STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . vi

PETITION FOR A WRIT OF CERTIORARI . . . . . . 1

OPINION BELOW . . . . . . . . . . . . . . . . . . . . . . . . . . 1

JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED . . . . . . . . . . . . . . . . . . . . 1

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . 3

PROCEEDINGS BELOW . . . . . . . . . . . . . . . . . . . . . 8

REASONS FOR GRANTING THE PETITION . . . . 8

I. FEDERAL COURTS SHOULD NOT ABSTAIN

FROM DECIDING A QUESTION OF FEDERAL

LAW MERELY BECAUSE A STATE

ADMINISTRATIVE PROCEEDING

INVOLVING AN ISSUE OF STATE LAW ON A

SIMILAR SUBJECT IS PROCEEDING . . . . . . . 8

A. Abstention from Deciding a Federal Question

Properly Raised in a Federal Court is the

Exception, Not the Rule . . . . . . . . . . . . . . . . . 8

iv

B. The State Administrative Agency Proceeding

did not Afford Baywood the Opportunity to

Raise the Preemption Issue . . . . . . . . . . . . . 12

C. Federal Preemption of the State Statute is

Facially Apparent and Should be Decided on

the Merits . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

II. THE PROPER STANDARD OF REVIEW THAT

APPELLATE COURTS SHOULD EMPLOY

WHEN REVIEWING A DISTRICT COURT’S

DECISION TO ABSTAIN UNDER YOUNGER

v. HARRIS IS THE DE NOVO STANDARD OF

REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

A. The Eighth Circuit Applied an Abuse of

Discretion Standard of Review . . . . . . . . . . 19

B. Five Other Circuits Apply a De Novo

Standard of Review . . . . . . . . . . . . . . . . . . . 19

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

APPENDIX

Appendix A Opinion and Judgment in the United

States Court of Appeals for the Eighth

Circuit

(August 8, 2018) . . . . . . . . . . . . . . App. 1

Appendix B Order in the United States District

Court, District of Minnesota, Civil No.

17-1011

(June 28, 2017) . . . . . . . . . . . . . . App. 15

v

Appendix C Judgment in a Civil Case in the

United States District Court, District

of Minnesota, Civil No. 17-1011

(June 28, 2017) . . . . . . . . . . . . . . App. 24

Appendix D Order in the United States Court of

Appeals for the Eighth Circuit

(September 14, 2018) . . . . . . . . . App. 26

Appendix E 29 U.S.C. §218(a) . . . . . . . . . . . . App. 28

vi

TABLE OF AUTHORITIES

CASES

Brillhart v. Excess Ins. Co. of America,

316 U.S. 491 (1942) . . . . . . . . . . . . . . . . . . . 17, 18

Chicot Cty. v. Sherwood,

148 U.S. 529 (1893) . . . . . . . . . . . . . . . . . . . . . . 15

Cohens v. Virginia,

6 Wheat. 264, 5 L. Ed. 257 (1821) . . . . . . . . . . . 15

Colorado River Water Conservation Dist. v. U.S.,

424 U.S. 800 (1976) . . . . . . . . . . . . . . . 2, 8, 18, 20

Diamond D. Constr. Corp. v. McGowan,

282 F.3d 191 (2d Cir. 2002) . . . . . . . . . . . . . . . . 19

Green v. City of Tucson,

255 F.3d 1086 (9th Cir. 2006) . . . . . . . . . . . 19, 20

Gwynedd Prop. v. Lower Gwynned Twp.,

970 F.2d 1195 (3d Cir. 1982) . . . . . . . . . . . . . . . 19

Harman v. Forssenius,

380 U.S. 528 (1965) . . . . . . . . . . . . . . . . . . . . . . . 6

Holmberg v. Holmberg,

578 N.W.2d 817 (Minn. Ct. App. 1998) . . . . . 5, 12

Home Care Ass’n of Am. v. Weil,

799 F.3d 1084 (D.C. Cir. 2015) . . . . . . . . . . . . . . 4

Huffman v. Pursue, Ltd.,

420 U.S. 592 (1975) . . . . . . . . . . . . . . . . . . . . . . . 6

Hughes v. Att’y Gen.,

377 F.3d 1258 (11th Cir. 2004) . . . . . . . . . . . . . 19

vii

Middlesex County Ethics Committee v. Garden

State Bar Association,

457 U.S. 423 (1982) . . . . . . . . . . . . . . . 6, 7, 10, 12

Moses H. Cone Memorial Hospital v. Mercury

Construction Corp., 460 U.S. 1 (1983) . . . . . . . . 18

Neeland v. Clearwater Mem. Hosp.,

257 N.W.2d 366 (Minn.1977) . . . . . . . . . . . . . . . . 5

New Orleans Pub. Serv., Inc. v. Council of City of

New Orleans (NOPSI),

491 U.S. 350 (1989) . . . . . . . . . . . . . . . . . . passim

Ohio Civil Rights Comm’n v. Dayton Christian

Schools, Inc., 477 U.S. 619 (1986) . . . . . . . . . . 6, 7

Railroad Commission of Texas v. Pullman Co.,

312 U.S. 496 (1941) . . . . . . . . . . . . . . . . . . . . . . . 6

Samuels v. Mackell,

401 U.S. 66 (1971) . . . . . . . . . . . . . . . . . . . . . . . . 6

Sirva Relocation, LLC v. Richie,

794 F.3d 185 (1st Cir. 2015) . . . . . . 3, 7, 9, 12, 15

Sprint Communications, Inc. v. Jacobs,

690 F.3d 864 (8th Cir. 2012) . . . . . . . . . . . . . . . . 9

Sprint Communications, Inc. v. Jacobs,

571 U.S. 69 (2013) . . . . . . . . . . . . . . . . . . . passim

Taylor v. Jaquez,

126 F.3d 1294 (10th Cir. 1997) . . . . . . . . . . . . . 20

Tex. Ass’n of Bus. v. Earle,

388 F.3d 515 (5th Cir. 2004) . . . . . . . . . . . . . . . 19

viii

Trust & Inv. Advisers, Inc. v. Hogsett,

43 F.3d 290 (7th Cir. 1994) . . . . . . . . . . . . . . . . 19

Willcox v. Consol. Gas Co. of New York,

212 U.S. 19 (1909) . . . . . . . . . . . . . . . . . . . . 11, 16

Wilton v. Seven Falls Co.,

515 U.S. 277 (1995) . . . . . . . . . . . . . . . . 17, 18, 19

Yellowbear v. Wyo. Att’y Gen.,

525 F.3d 921 (10th Cir. 2008) . . . . . . . . . . . . . . 20

Younger v. Harris,

401 U.S. 37 (1971) . . . . . . . . . . . . . . . . . . . passim

CONSTITUTION AND STATUTES

U.S. Const. Art. I, §8 . . . . . . . . . . . . . . . . . . . . . . . . . 1

U.S. Const. Art. III, §2 . . . . . . . . . . . . . . . . . . . . . 1, 2

U.S. Const. Art. VI, cl.2 . . . . . . . . . . . . . . . . . . . . . . 2

28 U.S.C. §400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

28 U.S.C. §1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

28 U.S.C. §2201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

29 U.S.C. §202 (2011) . . . . . . . . . . . . . . . . . . . . . . . 13

29 U.S.C. §213(a)(15) (2011) . . . . . . . . . . . . . . . . . . . 4

29 U.S.C. §218(a) . . . . . . . . . . . . . . . . . . . . . . . passim

Minn. Stat. §14.61 (2018) . . . . . . . . . . . . . . . . . . . . . 4

Minn. Stat. §14.62 (2018) . . . . . . . . . . . . . . . . . . . . . 4

Minn. Stat. §14.69 (2018) . . . . . . . . . . . . . . . . . . . . . 4

1

PETITION FOR A WRIT OF CERTIORARI

Petitioner, Minnesota Living Assistance, Inc. doing

business as Baywood Home Care, respectfully petitions

this Court for a writ of certiorari to review the

judgment of the United States Court of Appeals for the

Eighth Circuit in this case.

OPINION BELOW

The opinion of the Eighth Circuit is reported at 899

F.3d 548, and reproduced in the appendix hereto

(“App.”) at 1. The opinion of the District Court for the

District of Minnesota is reported at 2017 WL 2804905,

and reproduced at App. 15.

JURISDICTION

The judgment of the Eighth Circuit was entered on

August 8, 2018. App. 13. Petitioner filed a motion for

rehearing by the Court of Appeals and for a rehearing

en banc, which petition was denied on September 14,

2018. App. 26. This petition for certiorari is timely filed

within ninety (90) days after entry of the Eighth

Circuit’s order denying rehearing. The jurisdiction of

this Court is invoked under 28 U.S.C. §1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Article I, Section 8 of the Constitution provides that

Congress shall have power “To regulate Commerce

with foreign Nations, and among the several States.”

Article III, Section 2 of the Constitution provides

that “[t]he judicial power shall extend to all cases, in

law and equity, arising under this Constitution, the

2

laws of the United States, and treaties made, or which

shall be made, under their authority.”

Article VI, Clause 2 of the Constitution provides

that “This Constitution, and the Laws of the United

States which shall be made in Pursuance thereof; and

all Treaties made, or which shall be made, under the

Authority of the United States, shall be the supreme

Law of the Land; and the Judges in every State shall be

bound thereby, any Thing in the Constitution or Laws

of any state to the Contrary notwithstanding.”

The FLSA Savings Clause, 29 U.S.C. §218(a)

provides in relevant part: “Relation to Other Laws: (a)

No provision of this chapter or of any order thereunder

shall excuse noncompliance with any Federal or State

law or municipal ordinance establishing a minimum

wage higher than the minimum wage established

under this chapter or a maximum work week lower

than the maximum workweek established under this

chapter . . . .” App. 28.

INTRODUCTION

This Court has said that “it has never been

suggested that Younger requires abstention in

deference to a state judicial proceeding reviewing

legislative or executive action. Such a broad abstention

requirement would make a mockery of the rule that

only exceptional circumstances justify a federal court’s

refusal to decide a case in deference to the States.” New

Orleans Pub. Serv., Inc. v. Council of City of New

Orleans (NOPSI), 491 U.S. 350, 386 (1989); Colorado

River Water Conservation Dist. v. U.S., 424 U.S. 800,

817 (1976). When a federal court cedes its authority to

decide a case that is properly before it simply because

3

a state administrative agency is acting under a state

law involving the same general subject matter in a civil

administrative proceeding, it violates the

Constitutional mandate and teachings of this Court to

exercise that jurisdiction.

To reach a decision remarkably similar to one that

this Court rejected only five years ago, the Eighth

Circuit adopted a three-part paradigm or taxonomy

developed by the First Circuit in different

circumstances. Sirva Relocation, LLC v. Richie, 794

F.3d 185 (1st Cir. 2015). The taxonomy, however, is

merely a recycled version of the Eighth Circuit’s

analysis of Younger abstention principles that this

Court rejected unanimously in Sprint Communications,

Inc. v. Jacobs, 571 U.S. 69 (2013). Thus, two courts of

appeals have departed from this Court’s Younger

abstention teachings and have given Younger

abstention principles a far-ranging and nearly limitless

reach, well beyond the limits this Court articulated

most recently in Sprint. This Court’s review is

warranted.

STATEMENT OF THE CASE

Congress acted to the full extent of its power under

the Commerce Clause of the U.S. Constitution when it

established in the FLSA a national standard for

minimum wages and maximum hours in a workweek

after which a premium or overtime rate of pay must be

paid by covered employers. It reinforced this view in a

Savings Clause enacted as part of the original FLSA.

29 U.S.C. §218(a). Under this provision, the states

remained free to enact laws providing a higher

minimum wage or shorter maximum workweek for

overtime purposes. Nearly all states’ laws meet at least

4

one or both of these “safe harbor” provisions. The

Minnesota Fair Labor Standards Act, however,

satisfied neither of these two requirements of the

Savings Clause during the relevant time period of

March 2012 to March 2014.

When it filed its complaint in federal court,

Baywood was a respondent in a civil administrative

proceeding brought by a state executive branch agency

under the Minnesota Fair Labor Standards Act to

recover allegedly due wages for overtime compensation

to “companions,” a subset of domestic service

employees.1 The case was brought under Minnesota

Administrative Procedure Act and presented to an

Administrative Law Judge (“ALJ”), who issued a

recommended order.2 Because the Minnesota state

1

At the time, Baywood’s companion employees were completely

exempt from the minimum wage and overtime provisions of the

FLSA. 29 U.S.C. §213(a)(15) (2011). The exemption for companions

employed and furnished by staffing agencies was eliminated by the

U.S. Department of Labor by regulations that became effective

January 1, 2015. See Home Care Ass’n of Am. v. Weil, 799 F.3d

1084, 1088-90 (D.C. Cir. 2015).

2

The Minnesota Administrative Procedure Act is found in chapter

14 of Minnesota Statutes. The Commissioner of the Department of

Labor and Industry (“DLI”), however, and not the ALJ, is the final

decision-maker in this proceeding under the state statute. Minn.

Stat. §14.61 (2018). The Commissioner may accept, reject, or

modify the recommended order, including legal conclusions

reached by the ALJ. Minn. Stat. §14.62 (2018). Although the state

appellate courts review the final decision of the Commissioner,

they do so under a narrow and deferential standard of review.

Minn. Stat. §14.69 (2018). The state appellate courts will not

consider legal issues not raised before the Commissioner. In this

case, on review of the Commissioner’s final order, the Minnesota

5

agency, under state law, has no authority to decide

constitutional challenges. Petitioner could not have

raised the question of federal preemption in the state

administrative proceeding.3

Baywood presented to the District Court a single

issue arising under a federal statute and the U.S.

Constitution: is the Minnesota Fair Labor Standards

Act not saved against preemption by the FLSA because

the state statute fails to satisfy the Savings Clause? To

resolve this question, the District Court was not called

on to halt or otherwise interfere with an ongoing state

judicial criminal proceeding, a case implicating the

state supreme court’s authority, or a civil

administrative proceeding that was akin to a criminal

proceeding.

Court of Appeals rejected it, holding as Petitioner had argued that

the agency engaged in unauthorized rulemaking under state law.

In the Matter of Minn. Living Assistance, Inc., d/b/a Baywood

Home Care, 919 N.W. 2d 87, 95 (Minn. Ct. App. 2018, review

granted (Minn. Sup. Ct. Nov. 13, 2018). The Minnesota Supreme

Court has granted review of that decision.

3

The state’s appellate courts have held that administrative

agencies lack subject matter jurisdiction over constitutional issues.

Neeland v. Clearwater Mem. Hosp., 257 N.W.2d 366, 368

(Minn.1977). Holmberg v. Holmberg, 578 N.W.2d 817 (Minn. Ct.

App. 1998). Generally, a legal issue not raised in the agency

proceeding will not be considered on review by the state’s appellate

courts. In re Minn. Living Assistance, Inc., 919 N.W. 2d at 93. The

issue of FLSA preemption of the Minnesota FLSA was not

considered in the agency proceeding or in the Minnesota Court of

Appeals, nor is it an issue on which the Minnesota Supreme Court

has granted review.

6

This is not a case where a federal plaintiff presented

its federal constitutional argument to a state agency

and, only when it became clear that the agency would

go against it, filed a complaint in the federal court. See

Ohio Civil Rights Comm’n v. Dayton Christian Schools,

Inc., 477 U.S. 619, 624-25 (1986). The federal court

could have decided the federal preemption question

without enjoining or impacting the state agency

proceeding except to the extent any decision of a

federal court controls on a question of federal law. See

NOPSI, supra at 372-73. The FLSA’s Savings Clause is

a statute that allows compliant state laws to coexist

with the federal statute and plainly contemplates that

the question of whether a state law is within the ambit

of its protection is a question of federal law.

This Court’s abstention doctrines seek to avoid

federal courts’ interference with state government

functions, including specialized tribunals, or by

inserting themselves in matters of unsettled or

uncertain state law interpretation, thereby generating

unnecessary friction in federal-state relations.4

Younger v. Harris, and its companion case Samuels v.

Mackell, 401 U.S. 66 (1971), instructed the federal

courts to stay their hand when a party sought to enjoin

or to obtain a declaratory judgment that would halt

run-of-the-mill state criminal proceedings. Later cases

have applied Younger to civil proceedings that are akin

to criminal prosecutions or to a state judiciary’s

discipline of attorneys licensed by that jurisdiction.

Huffman v. Pursue, Ltd., 420 U.S. 592 (1975);

Middlesex Cty. Ethics Comm. v. Garden State Bar

4

Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 500

(1941); Harman v. Forssenius, 380 U.S. 528, 534-35 (1965).

7

Ass’n, 457 U.S. 423 (1982). This deference to state

criminal and certain judicial proceedings, however,

requires careful discernment of the boundaries of “Our

Federalism.” Younger v. Harris, 401 U.S. 37, 44 (1971).

When a case is properly before a federal district

court and a federal question can be decided without

enjoining a state administrative or judicial proceeding

or directly interfering with it, the federal court should

proceed to decide the case on the merits. This is

especially so when no complex or unsettled issue of

state law – or for that matter any issue of state law –

is involved. In dismissing this case, the lower courts

deprived a federal plaintiff of its right to seek a federal

judicial determination of a matter of federal law.

The Eighth Circuit adopted an unwarranted and

expansive view of Younger abstention, when it

borrowed the taxonomy developed by the First Circuit

in Sirva Relocation, LLC v. Richie, 794 F.3d 185 (1st

Cir. 2015). The Court of Appeals took the view that

because the state agency had initiated the proceeding

and because it had imposed “liquidated damages”

under the state statute, and that the statute provided

for potential criminal penalties – although no criminal

charge or prosecution had been commenced, nor was

one likely to be commenced – the state administrative

proceeding was like that in Ohio Civil Rights

Commission v. Dayton Christian Schools, Inc., 477 U.S.

619 (1986).5 Baywood sought rehearing en banc and

informed the Court of Appeals of the Minnesota Court

of Appeals’ decision holding that the Commissioner had

5

For the reasons stated infra at part I.B., this case is

distinguishable on its facts.

8

engaged in unlawful rulemaking, but the Court of

Appeals denied rehearing. App. 26.

PROCEEDINGS BELOW

The District Court dismissed the case without

prejudice on the ground that it should abstain from

deciding the case based on this Court’s decision in

Younger v. Harris. On appeal, the Eighth Circuit

affirmed. The Court of Appeals denied Baywood’s

petition for a rehearing en banc.

REASONS FOR GRANTING THE PETITION

I. FEDERAL COURTS SHOULD NOT ABSTAIN

FROM DECIDING A QUESTION OF FEDERAL

LAW MERELY BECAUSE A STATE

ADMINISTRATIVE

PROCEEDING

INVOLVING AN ISSUE OF STATE LAW ON A

SIMILAR SUBJECT IS PROCEEDING

A. Abstention from Deciding a Federal

Question Properly Raised in a Federal

Court is the Exception, Not the Rule.

A federal court’s obligation to hear and decide on

the merits cases properly before it is “virtually

unflagging.” Colo. River Water Conserv. Dist. v. U.S.,

424 U.S. 800, 819 (1976). This Court has instructed

that “there is no doctrine that the availability or even

the pendency of state judicial proceedings excludes the

federal courts.” NOPSI, supra at 373; Sprint, supra at

72. This case involves a state administrative agency

civil proceeding, which does not qualify as one of

Younger’s three “exceptional circumstances”

warranting abstention in the interest of comity or “Our

Federalism.”

9

Relying on a three-step taxonomy developed by a

sister circuit in Sirva Relocation, LLC v. Richie, 794

F.3d 185 (1st Cir. 2015), the Eighth Circuit concluded

the agency proceeding was a civil proceeding

resembling a criminal prosecution. The Court of

Appeals reasoned that the agency proceeding (1) was

initiated by the state in its sovereign capacity,

(2) involved sanctions against the federal plaintiff for

some wrongful act, and (3) included an investigation

and culminated in formal charges.

The Court of Appeals’ reliance on Sirva is

misplaced, first, because the First Circuit proceeded

from a flawed premise. That court began its analysis of

Younger preemption by stating: “Fidelity to that

doctrine [Younger abstention] requires federal courts,

in the absence of extraordinary circumstances, to

refrain from interfering with certain state

proceedings.” Sirva, supra at 189 (emphasis added).

The obvious misstep is that this Court has stated

repeatedly and explicitly that the assumption of

jurisdiction by federal courts is the rule and abstention

is the exception. The taxonomy devised by the First

Circuit, and adopted by the Eighth Circuit, misreads

this Court’s precedents. It conflates the initial

determination of whether Younger applies at all with

the consideration of extraordinary circumstances such

as harassment or bad faith that dictate that, even

when Younger would apply, a federal court should

nevertheless exercise its jurisdiction and decide the

case. Despite having the benefit of this Court’s decision

in Sprint available to it, the Sirva court merely

repackaged the rejected analysis in Sprint

Communications, Inc. v. Jacobs, 690 F.3d 864 (8th Cir.

2012). That rationale defies this Court’s “dominant

10

instruction” that NOPSI restricts the application of

Younger to only the three exceptional categories

therein defined. Sprint, supra at 78.

The Court of Appeals also considered the additional

factors in Middlesex County Ethics Committee v.

Garden State Bar Association, 457 U.S. 423 (1982).

While adverting to the Middlesex factors as additional

considerations, it is apparent that the Court of Appeals

ascribed to them far more significance than is

warranted. The First and Eighth Circuit’s approach to

Younger preemption will normally lead to preemption.

This is so because reliance on the Middlesex factors in

this manner creates a presumption of abstention. The

first two Middlesex factors – (1) the existence of an

ongoing state proceeding judicial in nature, which

(2) implicates an important state interest – when

applied to administrative agency proceedings nearly

always will be satisfied. This Court has recognized the

opportunity for manipulation that lies in the

application of these factors “[d]ivorced from their quasicriminal context.” Sprint, supra at 81-82.

The Court of Appeals fashioned an unwarranted

expansion of Younger by labeling an administrative

agency proceeding as “judicial” in character. Most state

agency proceedings, as in this case, involve some type

of proceeding that is designed to meet minimal

standards of procedural due process. The involvement

of an administrative law judge and the development of

a record at an evidentiary or summary disposition

hearing, create the appearance of a judicial proceeding.

But, that does not make them the type of judicial

proceeding envisioned by this Court for the special

deference that Younger abstention accords to them.

11

Fundamentally, the type of administrative proceeding

involved in this case falls squarely within the category

of proceedings to which this Court has held no

deference is due under Younger. NOPSI, supra at 365;

Sprint, supra 571 U.S. at 81-82.

The risk to federal court jurisdiction in the approach

adopted by the courts below is that there are

innumerable state administrative agencies that exist to

enforce an ever-expanding array of state laws. The

Eighth Circuit’s decision in reliance on the First

Circuit’s taxonomy, establishes a rule that the mere

commencement of a state agency proceeding deprives

a federal court of the authority to decide a question of

federal law that relates in some way to the same

subject matter. This Court addressed this point in

NOPSI: “it has never been suggested that Younger

requires abstention in deference to a state judicial

proceeding reviewing legislative or executive action.

Such a broad abstention requirement would make a

mockery of the rule that only exceptional circumstances

justify a federal court’s refusal to decide a case in

deference to the States.” 491 U.S. at 368. This Court’s

precedents recognize the right of a party to choose a

federal forum in which to present a claim that is within

the federal courts’ jurisdiction. Willcox v. Consol. Gas

Co. of New York, 212 U.S. 19, 40 (1909); NOPSI, supra

at 359.

12

B. The

State

Administrative

Agency

Proceeding did not Afford Baywood the

Opportunity to Raise the Preemption Issue.

Even if the state proceeding were akin to a criminal

proceeding and implicated important state interests, a

further requirement of Younger, and the final

Middlesex factor, is that the federal plaintiff must be

able to raise federal constitutional issues in the state

proceeding. Under Minnesota law, the state agency

may not hear constitutional challenges. Holmberg v.

Holmberg, 578 N.W.2d 817 (Minn. Ct. App. 1998). In

contrast to the situation in Sirva,6 the decision on

which the Eighth Circuit relied, Baywood did not seek

a ruling on the preemption issue from the

administrative law judge or the agency head, nor did

6

The situation in Sirva was materially different than the facts in

this case. In Sirva, the federal plaintiff argued that the

Massachusetts Law Against Discrimination, which is enforced by

the Massachusetts Commission Against Discrimination (“MCAD”)

was “preempted by the Employment Retirement Income Security

Act of 1974 (ERISA) in a case initiated by a private complainant,

who challenged his employer’s long-term disability plan on the

basis that it offered less favorable benefits to certain classes of

individuals with disabilities. The case dragged on in the MCAD for

nearly six years before the federal plaintiff (respondent in the state

agency proceeding) sought a federal declaration of preemption.

But, previously the federal plaintiff had raised the preemption

issue before the agency and could have presented that argument

to the MCAD and later to a state court on review. The First Circuit

also observed that the MCAD could and would be able to address

the federal issue. Essentially, the federal plaintiff in Sirva

attempted to wrest an ongoing proceeding from a state agency

after litigating the issue of federal preemption and not receiving

the response it desired rather than take an appeal to the state

court under the applicable statutory procedure.

13

Baywood seek to enjoin the state agency proceeding or

seek review of the agency’s final decision in federal

court.7 The preemption issue was presented solely to

the federal court and is not presented in the state

appellate courts, which do not consider a legal issue

unless it was presented to the agency.8

C. Federal Preemption of the State Statute is

Facially Apparent and Should be Decided

on the Merits.

The FLSA contains an express Congressional

Finding and Declaration of Policy. The FLSA evinces

Congress’s intention to establish a national standard

for minimum wages, overtime hours for a broad range

of covered employers and employees, eliminate many

forms of child labor, and to ensure the free flow of

goods in interstate commerce. 29 U.S.C. §202 (2011). To

remove obstacles to achieving these goals, Congress

addressed the FLSA’s provisions in relation to state

and local laws on the same subject and included a

Savings Clause that states unambiguously that states

are free to provide for a higher minimum wage or a

7

Although the complaint contemplated a request for injunctive

relief, Baywood did not file a motion to enjoin the state proceeding.

8

The Minnesota Court of Appeals, on August 20, 2018, reversed

and remanded the agency’s decision for further proceedings,

holding that the equivalent of a summary judgment in favor of the

agency was inappropriate. The state Court of Appeals also held

that the agency had engaged in unauthorized rulemaking. 919

N.W. 2d at 96. The Minnesota Supreme Court has granted review

of the intermediate appellate court’s decision. The Minnesota

Court of Appeals’ decision was called to the attention of the Eighth

Circuit in Petitioner’s Request for Rehearing En Banc.

14

lower maximum workweek. Only in those

circumstances is a state’s law compliant with the

FLSA’s Savings Clause and “saved” from preemption.

This Court has not had occasion to consider the

application of the Savings Clause.9

There is no doubt, and the record evidence is

uncontroverted, that during the relevant time period,

March 2012 to March 2014, The Minnesota Fair Labor

Standards Act (“MFLSA”) required a lower minimum

wage than the FLSA and a greater maximum

workweek standard for overtime than the FLSA. What

is presented is a question of federal law: whether the

FLSA preempts a state law that plainly does not fall

within the terms of its Savings Clause. Consistent with

this Court’s decision in NOPSI, the issue of federal

preemption was ripe for review when the state agency

issued its final order. NOPSI, supra at 372-73.

The Court of Appeals reasoned that the question

had not been considered previously by the Circuit, and

the few cases that had considered FLSA preemption or

the Savings Clause had delved into details of whether

a state could reject a FLSA exemption. App. 9-11. Yet,

even the First Circuit acknowledged that merely

9

The Eighth Circuit adverted to two federal court opinions that

considered the Savings Clause. Those cases addressed whether a

state may “regulate” by simply rejecting a federal exemption or

whether state wage and hour class actions may coexist in a FLSA

“collective action.” See App. 12, n.6. Briefing in the District Court

and Court of Appeals enumerated all or nearly all of the federal

cases that have dealt with the Savings Clause. No reported case,

however, involved a state statute that satisfied neither criterion –

minimum wages and maximum hours – as is the case with the

Minnesota statute.

15

because an issue is one of first impression it would not

result in a court abstaining from deciding a federal

question. See Sirva Relocation, LLC v. Richie, 794 F.3d

185, 198 (1st Cir. 2015). The type of inquiry that

apparently concerned the Eighth Circuit and that was

involved in Sirva would have been unnecessary in this

case because it can be easily and reliably determined –

indeed it is conceded by the state – that the Minnesota

Statute did not satisfy either prong of the Savings

Clause. No detailed examination of the state statute or

determination of unsettled issues of state law are

involved.

Stripped to its essence, the lower courts departed

from this Court’s Younger v. Harris abstention

teachings by constructing an analytical framework that

will almost always result in abstention. The taxonomy

employed by the Court of Appeals is nothing more than

a recycled or “new and improved” version of the same

rationale this Court soundly rejected in Sprint. It

ignores the bedrock principle recognized and reiterated

by this Court in NOPSI that federal courts are

obligated to decide cases that are properly brought

before them. There this Court said:

Our cases have long supported the proposition

that federal courts lack the authority to abstain

from the exercise of jurisdiction that has been

conferred. Cohens v. Virginia, 6 Wheat. 264, 404,

5 L. Ed. 257 (1821); Chicot Cty. v. Sherwood, 148

U.S. 529, 534 (1893). And, it follows that [w]hen

a Federal court is properly appealed to in a case

over which it has by law jurisdiction, it is its

duty to take such jurisdiction. . . . The right of a

party plaintiff to choose a Federal court where

16

there is a choice cannot be properly denied.

Willcox v. Consol. Gas. Co., 212 U.S. 19, 40

(1909).

NOPSI, 491 U.S. at 358.

This case presents an analogous factual setting to

that in NOPSI, where this Court held that abstention

was improper. There, as here, the federal court could

decide the federal question without interfering with the

state proceeding. As the Court said in NOPSI, “It is

true, of course, that the federal court’s disposition of

such a case may well affect, or for practical purposes

pre-empt, a future – or as in the present circumstances,

even a pending – state-court action. But there is no

doctrine that the availability or even the pendency of

state judicial proceedings excludes the federal courts.”

NOPSI, supra at 373.

This Court’s cases hold that abstention in any case

is the exception and exercising jurisdiction is the norm

for the federal courts. Only in “exceptional

circumstances” should a federal court consider

abstaining from deciding a case – particularly one

involving a question of federal law – that is properly

before it. Due respect for the functioning of a state’s

judicial system, including its enforcement of criminal

laws and its attorney discipline procedures, does not

extend to executive or legislative administrative

proceedings. NOPSI, supra at 373; Sprint, supra at 78.

If Younger abstention were to be extended to every case

in which a state administrative agency initiated an

investigation or case under a state law similar in

subject matter to a federal statute, federal courts would

be unable to fully perform their constitutional

functions.

17

The Eighth Circuit’s decision turns this Court’s

Younger jurisprudence on its head and makes

abstention the rule, leaving the lower courts no choice

except to search for an “exceptional circumstance” to

adjudicate the case. Federal-state comity does not

require federal courts to stand down from deciding

cases arising under the laws or Constitution of the

United States merely because a state administrative

agency is considering a case with a similar subject

matter. This is especially true with the FLSA, which

contemplates that both federal and state courts or

agencies will administer and interpret their respective

laws. This federal-state interplay exists, for example,

with respect to Title VII of the Civil Rights Act of 1964,

the Occupational Safety and Health Act of 1980, both

of which contemplate roles for the state and national

governments. The decision of the United States Court

of Appeals for the Eighth Circuit should be reversed or,

alternatively, vacated and remanded in light of Sprint.

II. THE PROPER STANDARD OF REVIEW THAT

APPELLATE COURTS SHOULD EMPLOY

WHEN REVIEWING A DISTRICT COURT’S

DECISION TO ABSTAIN UNDER YOUNGER v.

HARRIS IS THE DE NOVO STANDARD OF

REVIEW

This Court’s cases do not expressly state its views

concerning the appropriate standard of review of a

lower court’s decision to abstain under Younger. It may

be gleaned, perhaps, from the Court’s exposition in

Wilton v. Seven Falls Co., 515 U.S. 277 (1995), a case

involving the application of the abstention principles of

Brillhart v. Excess Ins. Co. of America, 316 U.S. 491

(1942), applicable to actions commenced under the

18

Federal Declaratory Judgments Act, then codified at 28

U.S.C. §400 and now at 28 U.S.C. §2201. There, the

Court rejected the view that Brillhart’s standard of

review that allowed district courts broad discretion to

exercise, or not, jurisdiction in a case should apply

more generally in abstention cases. The Court

distinguished cases brought under the Declaratory

Judgment Act, which “has been understood to confer on

federal courts unique and substantial discretion in

deciding whether to declare the rights of litigants.” Id.

at 286. The appropriate comparator, the Court said,

was its decision in Moses H. Cone Memorial Hospital v.

Mercury Construction Corp., 460 U.S. 1 (1983), in

which the more rigorous “exceptional circumstances”

test of Colorado River was applied to an action to

compel arbitration under §4 of the Federal Arbitration

Act. Id. at 281.

In its concluding paragraph in Wilton, supra, the

Court said:

In sum, we conclude that Brillhart v. Excess Ins.

Co., 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620

(1942), governs this declaratory judgment action

and that district courts’ decisions about the

propriety of hearing declaratory judgment

actions, which are necessarily bound up with

their decisions about the propriety of granting

declaratory relief, should be reviewed for abuse

of discretion. We do not attempt at this time to

delineate the outer boundaries of that discretion

in other cases, for example, cases raising issues

of federal law or cases in which there are no

parallel state proceedings. Like the Court of

Appeals, we conclude only that the District

19

Court acted within its bounds in staying this

action for declaratory relief where parallel

proceedings, presenting opportunity for

ventilation of the same state law issues, were

underway in state court.

Id. at 289-90.

A. The Eighth Circuit Applied an Abuse of

Discretion Standard of Review.

The Eighth Circuit applied an abuse of discretion

standard of review to the District Court’s decision to

abstain under Younger. More precisely, it appears that

this is a two-part standard: (1) the application of the

abstention principles is reviewed de novo, but (2) the

District Court’s decision to abstain is reviewed for an

abuse of discretion. According to the Court of Appeals,

an error of law would constitute an abuse of discretion.

The Eighth Circuit is in the minority of the courts of

appeals that have ruled on this point. The Eleventh

Circuit has applied a similar standard. Hughes v. Att’y

Gen., 377 F.3d 1258 (11th Cir. 2004). The Fifth Circuit

has applied a two-step standard that appears to be the

same as that applied in this case. Tex. Ass’n of Bus. v.

Earle, 388 F.3d 515 (5th Cir. 2004).

B. Five Other Circuits Apply a De Novo

Standard of Review.

The Second, Third, Seventh, Ninth, and Tenth

Circuits have held that the appropriate standard of

review is the de novo standard. Diamond D. Constr.

Corp. v. McGowan, 282 F.3d 191 (2d Cir. 2002);

Gwynedd Prop. v. Lower Gwynned Twp., 970 F.2d 1195

(3d Cir. 1982); Trust & Inv. Advisers, Inc. v. Hogsett, 43

F.3d 290 (7th Cir. 1994); Green v. City of Tucson, 255

20

F.3d 1086 (9th Cir. 2006); Yellowbear v. Wyo. Att’y

Gen., 525 F.3d 921 (10th Cir. 2008); Taylor v. Jaquez,

126 F.3d 1294 (10th Cir. 1997). Recognizing the

significance of a federal court’s decision to abstain from

exercising jurisdiction in a case that it is empowered to

hear, and mindful of this Court’s instructions that

abstention in any case is the exception and not the

rule, these courts of appeals have exercised plenary

review over District Court Younger abstention

decisions.

A de novo standard comports with the “virtually

unflagging” obligation of federal courts to decide cases

that are properly before them. See Colo. River, supra at

816 & n.22, 818; see also NOPSI, supra at 358. To

ensure appropriate judicial review of Younger

abstention decisions and to protect the jurisdiction of

the federal courts, a district court’s decision to abstain

in a case properly before it should be tested by the de

novo standard of review.

21

CONCLUSION

For all of the foregoing reasons, the petition for a

writ of certiorari should be granted.

Respectfully submitted,

Bruce J. Douglas

Counsel of Record

OGLETREE, DEAKINS, NASH,

SMOAK & STEWART, P. C.

Capella Tower

225 South Sixth Street, Suite 1800

Minneapolis, MN 55402

Telephone: 612.339.1818

Facsimile: 612.339.0061

Email: bruce.douglas@ogletree.com

Counsel for Petitioner

Dated: December 13, 2018